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NO 106: Misconceptions and Pain Points of a Poorly Constructed Program · PGgrowth - Planned Giving podcast

• 0:22
  SPEAKER_01: Hi everyone, Ed Sluga here with you again on the PG Growth Plan Giving Podcast.
• 0:28
  SPEAKER_01: Again, in this series of podcasts that we've launched for our 11th season, we've really been focusing on a theme throughout this, which is about good advice to create a plan giving program, about where to seek out that advice, how to be understanding of where the advice could come from when we have lots and lots of voices in the marketplace giving out that advice, sometimes freely, oftentimes cheaply.
• 0:59
  SPEAKER_01: A lot of times it does not match other advice that's being heard.
• 1:05
  SPEAKER_01: We're going to talk more and more about that advice, that counsel, that those consultants, those experts out there, and the advice they're giving in the coming weeks.
• 1:15
  SPEAKER_01: But I want to talk a little bit about what the ramifications are, the manifestations of not seeking out those voices when that can actually drive you towards a properly constructed program.
• 1:33
  SPEAKER_01: What happens when we seek out some of the wrong advice or listen to the wrong advice?
• 1:39
  SPEAKER_01: What does it do to our particular program?
• 1:42
  SPEAKER_01: You know, when a plan-giving program is not designed and administered and stewarded, and steward by steward we mean kind of managed properly, uh, the consequences can be really, really significant.
• 1:55
  SPEAKER_01: And it can be significant from a couple of different or a number of different positions.
• 2:01
  SPEAKER_01: We're going to give you five significant things that can be disrupted and impacted if the uh program itself is not uh constructed properly.
• 2:14
  SPEAKER_01: But let's start with some primary main misconceptions.
• 2:20
  SPEAKER_01: So specifically, what are some of the things that we often hear from some of those voices in the marketplace?
• 2:28
  SPEAKER_01: So one is that plan giving is a marketing program.
• 2:32
  SPEAKER_01: We hear that a lot, particularly from national organizations.
• 2:36
  SPEAKER_01: And this is when we're not all created equally when it comes to not-for-profits or charities.
• 2:41
  SPEAKER_01: National organizations, ones that have either one headquarters somewhere in the country and then tries to engage with donors across this very large expanse of land, um, they often feel that they have to lean into this definition of what plan giving is, that it's a marketing program.
• 3:01
  SPEAKER_01: There's lots of people who reinforce that fact.
• 3:04
  SPEAKER_01: They will tell you it's only marketing.
• 3:06
  SPEAKER_01: I've heard lots of different organizations who are serving the uh fundraising community around plan giving talking about this.
• 3:16
  SPEAKER_01: The important thing is send out information.
• 3:19
  SPEAKER_01: That's all you need to do.
• 3:20
  SPEAKER_01: Market, market, market, and the gifts just come in.
• 3:24
  SPEAKER_01: Well, that's not true.
• 3:26
  SPEAKER_01: It's not true, fully true.
• 3:29
  SPEAKER_01: What they're saying is gifts will come in, of course, gifts will come in.
• 3:32
  SPEAKER_01: Gifts will also come in if you don't market.
• 3:35
  SPEAKER_01: Marketing is important.
• 3:36
  SPEAKER_01: I'm not trying to discount that, but it's not primarily a marketing program.
• 3:41
  SPEAKER_01: It's a marketing and fundraising program.
• 3:44
  SPEAKER_01: Both parts of that need to be in place.
• 3:46
  SPEAKER_01: It's not enough simply to market.
• 3:48
  SPEAKER_01: We need to be involved in engagement once we're given the opportunity.
• 3:54
  SPEAKER_01: Over the last couple of years, we've done some reviews.
• 3:57
  SPEAKER_01: We've found certain organizations that fit into this national sphere.
• 4:02
  SPEAKER_01: Thousands of people who have requested information or have, as these marketing firms like to call them, have become hand raisers, they've raised their hand.
• 4:15
  SPEAKER_01: Uh, maybe there's been follow-up one time, maybe not.
• 4:19
  SPEAKER_01: Uh, what we did with both of those organizations is we estimated that there were literally hundreds of millions of dollars simply sitting there in that group because there hasn't been the engagement aspect of it.
• 4:33
  SPEAKER_01: So, one of the main misconceptions, it's primarily a marketing program.
• 4:37
  SPEAKER_01: It is not.
• 4:38
  SPEAKER_01: It's a full-fledged fundraising program which uses marketing as lead generation or prospect research.
• 4:47
  SPEAKER_01: And we'll talk about that more as we go along.
• 4:49
  SPEAKER_01: So, that's one of the misconceptions.
• 4:51
  SPEAKER_01: Another main misconception, it is easy.
• 4:54
  SPEAKER_01: We hear that a lot.
• 4:55
  SPEAKER_01: There's a lot of notions of that, that one button uh that you need to push.
• 5:02
  SPEAKER_01: There's uh advertisement out there for office supply company.
• 5:07
  SPEAKER_01: It's like this is easy, just press this button, everything will be solved.
• 5:11
  SPEAKER_01: That's simply not uh situation.
• 5:14
  SPEAKER_01: This is hard work, it's long-term work, it requires commitment, it requires uh constancy, it requires knowledge, it requires refreshing that knowledge.
• 5:25
  SPEAKER_01: This shouldn't scare anyone away.
• 5:27
  SPEAKER_01: Um, the reality is very clear, though.
• 5:30
  SPEAKER_01: This is not an easy uh um uh you know program of activity, it is a full fundraising program.
• 5:40
  SPEAKER_01: It's as easy as all of the other fundraising programs that you have.
• 5:44
  SPEAKER_01: Um, so that's another um uh misconception around this, that this is easy.
• 5:53
  SPEAKER_01: I think a final misconception around this is that um you know that plan giving is also gift planning.
• 6:04
  SPEAKER_01: And again, that's something that we know not to be true.
• 6:07
  SPEAKER_01: Plan giving is the operation of a program.
• 6:12
  SPEAKER_01: Uh, it is absolutely uh connecting with proactively through marketing, connecting with prospects, through engagement, through the fundraising process, uh, talking to them, bringing them towards a gift, maybe getting a chance to solicit them and ask them for a gift and securing those gifts.
• 6:30
  SPEAKER_01: Uh, gift planning is a unique uh situation that is in and of itself something that is done by seasoned professionals who are in the middle of a really truly proactive plan giving program.
• 6:46
  SPEAKER_01: Gift planning is about sitting down, talking to donors, about structuring gifts.
• 6:51
  SPEAKER_01: Perhaps all of that gift is deferred through an estate.
• 6:54
  SPEAKER_01: Sometimes that gift is some today, some in the future.
• 6:58
  SPEAKER_01: Um, and so we often use planned giving and gift planning synonymously, and that's a misconception.
• 7:06
  SPEAKER_01: There are lots of plan giving consultants out there, none of them are gift planners, really.
• 7:11
  SPEAKER_01: There's a lot of gift planners out there who really wouldn't know how to set up a plan giving program.
• 7:17
  SPEAKER_01: Um, if I'm splitting hairs here, the important part of this is it's not primarily a marketing program.
• 7:25
  SPEAKER_01: This is not necessarily easy to do, it takes effort, and we have to get our language right.
• 7:31
  SPEAKER_01: Really, that's that last piece.
• 7:33
  SPEAKER_01: There's a lot of misconceptions because we use language incorrectly, we use words and terms that are some we believe are synonymous and they are not.
• 7:41
  SPEAKER_01: So those are the misconceptions.
• 7:43
  SPEAKER_01: But let's talk about these significant consequences.
• 7:46
  SPEAKER_01: I want to highlight five significant consequences if you're not structuring a program properly.
• 7:54
  SPEAKER_01: First and foremost, number one, lost revenue.
• 7:57
  SPEAKER_01: If we're not doing this properly, we will lose revenue.
• 8:00
  SPEAKER_01: I hear one of the things that we often talk about when we go into an organization and seek out information and data about how their program is doing is we want to know how they're doing.
• 8:12
  SPEAKER_01: And a lot of times we we hear we're doing really, really well.
• 8:16
  SPEAKER_01: Uh, that's the feeling amongst staff.
• 8:18
  SPEAKER_01: But when you do the analysis against their opportunity, you see immediately that they're actually undervalued in this marketplace.
• 8:28
  SPEAKER_01: And frankly, most of the time when we go into an organization ready to do a review, those professionals want a review.
• 8:36
  SPEAKER_01: They want to know how to enhance.
• 8:38
  SPEAKER_01: And in that particular moment, what they're going to do is welcome that analysis.
• 8:46
  SPEAKER_01: But the key is what are they seeing?
• 8:48
  SPEAKER_01: What are we seeing?
• 8:50
  SPEAKER_01: Lost revenue.
• 8:51
  SPEAKER_01: Because you believe the program is going well, it doesn't necessarily mean it is.
• 8:55
  SPEAKER_01: And that can be from just some structural problems.
• 8:58
  SPEAKER_01: Um, prospective donors are perhaps not engaged properly and continuously.
• 9:04
  SPEAKER_01: Um, you know, because we're not following up, we're not doing stewardship the way we could.
• 9:09
  SPEAKER_01: Some of these commitments don't actually ever materialize.
• 9:13
  SPEAKER_01: Um, you know, there's also with poor documentation, uh, poor um record keeping, whether it's through the CRM or other activity, we just lose sight of GIFs.
• 9:24
  SPEAKER_01: We were within an organization at one point.
• 9:27
  SPEAKER_01: Um, and they had life insurance policies they knew of, but they hadn't, they did not know where any of the life insurance documents were.
• 9:36
  SPEAKER_01: So without proper um structure, there's a real chance that you are losing revenue and reducing future value of these gifts.
• 9:48
  SPEAKER_01: And it that is probably the case for the vast majority of programs out there, both passive-active programs, but also those proactive programs.
• 9:59
  SPEAKER_01: If they're not structured well, you're gonna lose revenue.
• 10:02
  SPEAKER_01: Another problem with that, and it goes back to one of the misconceptions here, is reputational damage.
• 10:10
  SPEAKER_01: Um, you can create reputational damage simply because you're not structured well, or you've taken that misconception and considered it to be primarily a marketing program, that hand raiser moment.
• 10:25
  SPEAKER_01: The fact is that everyone comes to the idea of creating a gift in their will, creating a will first and foremost, and then creating a gift for a charity on their own time.
• 10:35
  SPEAKER_01: And the reality, too, is that most individuals have multiple charities that are in their line of sight when it comes to giving a gift of this kind.
• 10:46
  SPEAKER_01: A properly structured program, you know, ensures that when someone reaches out to you to ask for a gift or ask for information about creating a gift, you're there to deal with that.
• 11:00
  SPEAKER_01: And remember, those other charities that are in the line of sight of that donor are also being reached out to.
• 11:07
  SPEAKER_01: And the donor is actually taking a moment to test who's serious about this.
• 11:13
  SPEAKER_01: So if we're in the world of, well, there are hand raisers and we'll send them a little information, never contact them again, see what happens.
• 11:21
  SPEAKER_01: Well, there are other organizations that will also send more information, but call to follow up, call again to follow up, be a resource, be a partner in the journey that the donor is going through.
• 11:32
  SPEAKER_01: So unless we uh you know uh follow through with that, there's an opportunity for us to be to lose uh um standing in the donor's eyes.
• 11:43
  SPEAKER_01: And by the way, those donors speak to our broader stakeholders, and we lose that reputational damage happens beyond that.
• 11:50
  SPEAKER_01: There are also other things in the state administration, and in the following up on donor intentions, uh, the horror stories around donor intentions within a will uh that are not followed up with by the by the program because it's not properly structured through policies and procedures.
• 12:13
  SPEAKER_01: Uh, the reputational risk, enormous.
• 12:16
  SPEAKER_01: Uh finding out uh that you know your family member who passed away provided a gift to an organization to do some philanthropic um uh you know uh initiative, and it's not there, it's going somewhere else, even though it was accepted to do that.
• 12:36
  SPEAKER_01: Uh and you know, that's horribly damaging.
• 12:39
  SPEAKER_01: A lot of times that's done naively, not maliciously.
• 12:43
  SPEAKER_01: There's not an understanding of the proper way to set that up.
• 12:47
  SPEAKER_01: So um, you know, reputational risk uh is really there, which leads to the second uh you know moment of this risk factor, uh, which is legal and compliance.
• 13:00
  SPEAKER_01: Um, those sorts of activities and not dealing with that state administration aspect, which can cause reputational risk, which I just mentioned, can also lead to um legal and compliance issues.
• 13:15
  SPEAKER_01: Uh in fact, uh, you know, without proper procedures, without proper follow-through, um, there's there can be a failure to rate maintain proper documentation, to follow the process of a fully involved uh individual in this plan-giving sphere.
• 13:33
  SPEAKER_01: That uh, you know, and working with the state trustees and their representatives to get this done.
• 13:38
  SPEAKER_01: So that brings about a problem from the legal structure of this.
• 13:45
  SPEAKER_01: Again, one of the misconceptions, this is easy.
• 13:48
  SPEAKER_01: It's not easy, it's difficult, and we need to understand some of the difficulty.
• 13:53
  SPEAKER_01: Um, the reality is if we do this, the amount of money that we can raise just increases.
• 13:58
  SPEAKER_01: So those legal and compliance risks are there without a properly structured program.
• 14:04
  SPEAKER_01: Another one is, frankly, uh donor experience.
• 14:11
  SPEAKER_01: Uh again, I talked a little bit about that already about people reaching out and not not reaching back.
• 14:17
  SPEAKER_01: That's a donor experience where they're judging you.
• 14:19
  SPEAKER_01: Donors are judging you uh on that experience.
• 14:22
  SPEAKER_01: Whether they're doing that on purpose or whether they're just in the back of their minds, judgment happens.
• 14:28
  SPEAKER_01: So plant-giving donors often make deeply personal decisions to reach out to you and to consider a gift.
• 14:36
  SPEAKER_01: And the lack of proper follow-up, proper communication, recognition, and stewardship can leave donors feeling undervalued, feeling cold about their experience with you.
• 14:47
  SPEAKER_01: And if there's an inconsistent messaging, if there's, you know, one day we're talking about plan giving and we're talking about it regularly, we've got a recognition group, and then that all goes away, and then 18 months later we launch it again.
• 15:03
  SPEAKER_01: This is really problematic.
• 15:05
  SPEAKER_01: And you know, this um activity brings about doubt in the in the donor because their experience isn't really wonderful.
• 15:13
  SPEAKER_01: And and so we have to understand that that's a risk because that can permeate through all the other areas of fundraising, uh, annual and major giving.
• 15:23
  SPEAKER_01: And remember, these are all related and they're interlinked.
• 15:26
  SPEAKER_01: So that poor donor experience is gonna lead to um uh you know that getting out into the marketplace.
• 15:35
  SPEAKER_01: And then finally, when you don't have uh a properly constructed program, the fifth uh major problem that can come out that we're gonna highlight today is it will bring about unrealistic expectations, which can in fact lead to the abandonment of the program, uh, where uh senior leadership, board leadership, even staff think, well, you know, we started all this pro we started this program, we were we were promised it would be easy, we were promised that overnight we would have this stream of revenue, or um, you know, we just had to follow the dots and we would get to this fully fledged program.
• 16:17
  SPEAKER_01: Didn't happen.
• 16:18
  SPEAKER_01: So it's unrealistic in terms of the approach.
• 16:21
  SPEAKER_01: Um, and it undermines the commitment of the organization to the program.
• 16:26
  SPEAKER_01: And we you know, we will talk about this.
• 16:29
  SPEAKER_01: The key element is long-term commitment.
• 16:33
  SPEAKER_01: So these these realities um you know can lead to disillusionment amongst uh leadership uh when it comes to that.
• 16:44
  SPEAKER_01: I've been in many situations where whether I am running the program or whether we're consulting with the organization and it's it's leadership in the program or over the program, who will say, Well, we had someone in here and they told us to do these things.
• 17:02
  SPEAKER_01: Um and you know, it hasn't really led to anything.
• 17:06
  SPEAKER_01: Uh, for example, uh, one of our senior counsel, newly retired, uh, ran a program of marketing for the not-for-profit sector and was very successful at that marketing endeavor.
• 17:19
  SPEAKER_01: But we as a consulting firm would in fact go in afterwards and we would hear, well, they were in here, and yes, they did this marketing activity, and they left us with a bunch of leads, uh, as they call them, or prospects, but nothing ever came of it.
• 17:35
  SPEAKER_01: Uh, and and it was costly.
• 17:38
  SPEAKER_01: Um, and so ultimately uh we didn't do anything with that.
• 17:43
  SPEAKER_01: In fact, we have turned our attention away from that because you know, the the finishing that thought would be we are we're a bit disillusioned with the structure of the program because it wasn't really a fully fledged program, it was simply a marketing tactic.
• 18:00
  SPEAKER_01: So that's why we require this uh approach that understands the true fundamentals and builds on those fundamentals for true long-term uh benefit to the program.
• 18:16
  SPEAKER_01: Um, so those are the three misconceptions, five pain points, five five uh outcomes from a poorly structured uh program.
• 18:27
  SPEAKER_01: Uh love to hear what you think about this.
• 18:29
  SPEAKER_01: You can reach me at ed at pggrowth.com.
• 18:33
  SPEAKER_01: Uh, look for more of our our uh podcasts on iTunes or Spotify.
• 18:39
  SPEAKER_01: Uh in the coming weeks, uh, I've been promising special guests and other voices in this podcast that's going to start.
• 18:47
  SPEAKER_01: And we hope you enjoy that because now we've kind of named where we're coming from.
• 18:53
  SPEAKER_01: Uh, we're gonna do that one more time, and then we're gonna start talking about how do we truly move, either uh from the start, creating a program from scratch, doing it properly with the proper fundamentals, or perhaps you've inherited one of these programs or involved in one, or you've gotten yourself down in the rabbit hole of one of them.
• 19:15
  SPEAKER_01: You want to get out and start moving along.
• 19:16
  SPEAKER_01: We're gonna talk about that too.
• 19:18
  SPEAKER_01: I look forward to talking to you about this, talking with others about this so that you can listen.
• 19:24
  SPEAKER_01: Remember, we're at pggrowth.com.
• 19:26
  SPEAKER_01: Love to hear from you, check us out, and we'll talk to you next time.
• 19:29
  SPEAKER_01: Thanks so much.
• 19:36
  SPEAKER_00: Thank you for listening to the PG Growth Podcast.
• 19:38
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• 19:47
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